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Everything about the Ask a Ninja videoblog phenomenon smacks of a new form of entertainment. Two guys in Los Angeles produce a series of simple, low cost video clips where a ninja character answers profound and ridiculous questions. The comedic series gets popular as a video podcast through iTunes, with viewership of 300,000 to 500,000 per episode, and the show’s web presence branches out to include an online store for merchandise.

But when the Ask a Ninja creators, Kent Nichols and Douglas Sarine, wanted to get serious about making money as entertainers, they went the old school route and hired the behemoth United Talent Agency (UTA). Recently that representation bore fruit as the pair signed on with Federated Media to have the ad network sell advertising on Ask a Ninja in a revenue-sharing deal worth $300,000 per year (if the site maintains its popularity).

“It’s not an accident we’ve set up under a Hollywood model and not a Silicon Valley model,” Nichols told me via email. “UTA is much better at negotiating than I am. And they only make money when we make money, so they are extremely motivated to get us the best deal possible. Creators are never going to have enough clout on their own to negotiate better deals with the YouTubes of the world. We tried making deals without agents and they failed miserably because we didn’t know what to ask for or how to ask for it. Agents save you a lot of time and effort.”

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Kent Nichols

So while YouTube and other popular video sites might make it easier for up-and-coming talent to get noticed — without having to send out a demo reel by mail — there’s still a need for agents and managers to decipher the tangle of contracts and offers from online and offline media outlets. Nichols notes that the Internet might have changed the way video is distributed, but not the way artists can maximize their revenues.

“The key thing that [UTA] gets is that new media is just show business, but without the distributor,” Nichols said. “But show biz is show biz. It’s just contracts and negotiations. That’s what they know, that’s what they do. The technology doesn’t change that — what it does change is the need to go through a distributor. Now two people and a laptop can reach as big an audience as a lot of shows on cable. That is the shift. So we have a show, no distributor, but we still have people that want to engage us in business. And to do that you need to negotiate in a professional and reliable manner. [UTA] takes care of that aspect for us and allows Douglas and myself to concentrate on being funny.”

UTA has been making the most noise with their online efforts, launching a special online division with three young agents, and scoring a profile in The New York Times last fall. That division, UTA Online, plans to launch a special website to promote its efforts and ask for submissions — a rare openness in the talent agency world where rival Creative Artists Agency barely has a hollow website. Plus, UTA signed a partnership with video site Veoh to start a UTA channel that solicits videos and highlights the work of clients.

Brent Weinstein, who heads UTA Online, told me there was a key difference between what talent agencies are offering clients now as opposed to some years ago when many agencies set up dot-com divisions that later closed down.

“We [have been] signing clients off the Internet for quite some time,” Weinstein said. “But because of the limitations of the Internet marketplace, one of the only ways we could find to represent those artists was to flip them into traditional media [like TV]. There wasn’t really a marketplace online, but as the marketplace changed last year, we saw that there was a way to find the most original and talented voices on the Internet and [make money for] them in that world.”

Will Agents Be Eliminated Online?

But as with all disruptive technology, the question arises: If the Internet allows creative types to go directly to their audience, why can’t they get paid directly without the involvement of studios, producers or agents? In the blogging world, sites such as Back to Iraq and TalkingPointsMemo have produced revenue from advertising and donations without the owners signing up with larger publications.

The prominent videoblog Rocketboom made nearly $250,000 last year without the aid of any agency. In fact, the blog’s first ad deal brought in $80,000 thanks to an eBay auction. Still, Rocketboom’s Andrew Baron told me he did finally hire a business development specialist, so he could concentrate on the creative side of videoblogging.

“I have never used an agent,” he said via email. “So far, all of the deals for Rocketboom were instigated, managed and closed by me personally up until a few months ago when [we hired] our business development guy, Mark Mathewson. He filled the major gap I have always been missing because I am not experienced in business in general…This has just enabled me to take major action on the creative production front but continue to be innovative in building a global studio.”

Now, YouTube has said it will share ad revenues with video creators, just as various rival video sites such as Revver have been doing. That might mean that YouTube could do for video creators what Google did for bloggers with the automated AdSense ad network: bring in quick and easy money.

UTA’s Weinstein believes there’s a lot of growing business opportunities online, but that the role of the agent will survive.

“In an age where the user is more empowered than ever, and the creator is more empowered than ever, we have to be very delicate about the way we explain our value proposition,” he said. “When YouTube and other companies are willing to split up ad revenues with creators, [some people think] the role of the agency disappears. Nothing could be further from the truth. Those programs offered by YouTube — which are fantastic and I’m glad they’re sharing the wealth — they are commoditizing talent. For the truly exceptional artist, the .0001% of people that we want to be in business with, we think there is a unique set of opportunities that should be treated differently than the masses.”

Michael Powers, the lead product manager at YouTube, told me via email that online momentum is growing but that the money wasn’t quite there yet.

“My take is that it’s too early — talent is developing but the missing piece is the money,” he said. “When the [revenues] start to roll in and the amounts grow you can bet the agents will want to be part of the arrangement. But two things will keep that at bay for a while: user-generated content goes direct to the audience, and you don’t have to go through a network; people can create their own sponsorship deals and use other DIY [do-it-yourself] approaches to funding. So the game is changing. I’m not sure how it will turn out. My sense is that many people will go it alone but bring in management to help them grow their fame and brand.”

One good case study involves an online-only sitcom called The Burg, with an eclectic cast of young characters trying to live together in an apartment in Williamsburg, Brooklyn. The production involves at least 17 people, including writers, actors, directors and producers, making it an expensive online video series. So far, the project has been self-funded by the co-creators Kathleen Grace and Thom Woodley, who have run up credit card debt and borrowed from friends and family.

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Kathleen Grace & Thom Woodley

Grace and Woodley told me they had had various “casual conversations” with TV networks and agents from UTA and CAA, but nothing serious had come of it yet. Grace said they get about six emails per week from video startup sites asking for them to post their videos there — but without any promise of substantial revenues.

“I think ‘The Burg’ works great on the Internet, but right now, there is no way to support a show with six characters, a crew and interwoven storylines, and the production level that we have,” Grace said. “It’s not Lonelygirl with one webcam of one girl with one friend.”

The pair said they’d be happy to have an agent help them out, and would jump at an offer of financial backing from a TV network or Internet site. UTA’s Weinstein, who is familiar with “The Burg,” said he thinks such episodic shows can be financed entirely online with sites such as Viacom’s ComedyCentral.com and MTV.com developing original web shows.

“Right now, we’re in business with clients creating episodic content for the Net and they’re getting paid reasonable fees for their creative services and production budget,” he told me. “The media companies are the ones paying the most for original content, and it’s not that different than the way TV shows are developed. I think there’s room for the creators of ‘The Burg’ to create content online or offline and succeed.”

The Daily Reel as Filter

With all the video-sharing sites online and the massive mountain of content on YouTube, how can an agent sort through the morass? The guys behind The Daily Reel, Jeff Stern and Jamie Patricof, want their site to be the go-to place for Hollywood to find the best up-and-coming video artists online, and are trying to help those artists improve their craft. The Daily Reel site includes industry news, a Top 10 list of spotlighted videos — with complete info on who shot them and how — and Stern and Patricof even help cut sponsorship deals for some of the video talent.

“YouTube and the other sites have a mishmash of content, with no rhyme or reason to them,” Stern said. “The only way things are filtered to the top is based on popularity, so you have the least common denominator content coming to the top, whether it’s lip-synching or a nipple slip or an amateur ‘Jackass.’…We wanted to find people who had real talent. As the site evolved it became the site to find out what’s going on in online video, whether it’s viral video or political stuff like the ‘macaca’ video [that sunk Sen. George Allen].”

The problem with the site is that it’s breaking down the editorial and business wall by highlighting the best content online with editorial reviews and then also putting a spotlight on videos The Daily Reel helped produce, such as a recent series from Sundance sponsored by GoDaddy.com. The pair denied the conflict of interest and said they were more concerned with getting attention for video artists and creating an online community to bring agents and creators together.

David Poland, a veteran online journalist covering the movie business, doesn’t believe that The Daily Reel has a viable business by trying to find and promote quirky online video stars.

“I think [The Daily Reel] is a good, but flawed idea,” Poland told me via email. “That is the ironic nature of all of this. If it is given structure, it is no longer viral. If it is viral, it can’t be monetized very well (aside from banners on YouTube pages). The balance is, I think, mom-and-pop level businesses….Online video is still a few years from peak, but the high will never be as high [as the movie business] and the niche that goes massive will be very, very rare.”

As Poland points out, the sale of TV shows and movies on iTunes hasn’t yet made a serious dent in the offline TV and movie business. But over time, that could change. And if agents want to be part of this new world of online content, they’re going to have to immerse themselves in it. Kathleen Grace, co-creator of “The Burg,” makes that point well in an email to me:

The emergence of shows like ‘The Burg’ and other longer, highly produced episodic content is going to force both the entertainment industry and the new media industry to reconsider their business models. Right now SAG [the Screen Actors Guild] doesn’t have a clear cut stance on original Internet content and the web world doesn’t understand that there are production costs involved in making this kind of content. I think the right agent could really drive this point home if he/she understood the economic model that the web world usually works with. It’s a very gray area, but very exciting and needs the kind of agent who is willing to learn an entirely different business.”

And if the agents don’t evolve, there will always be people like Andrew Baron at Rocketboom who will take their own initiative.

“I think there is an entrepreneurial spirit that some people have (including myself) which helps us see more opportunities and greater possibilities now that the established media powers have lost control of the audience,” Baron said.

What do you think? Will talent agents adapt and become important cogs in the online entertainment world, or will they become outmoded? Have you found financial success with your own online video for a broad audience without the aid of an agent? Or has an agent helped you with online and offline success? Share your story in the comments below and I’ll update this post.

UPDATE: The newish anchor on Rocketboom, Joanne Colan, emailed me just after my deadline with her own experience with agents. The videoblogger is a veteran of TV, and said she has always been the one to get the projects, and then hired an agent to finalize the deals. Here’s her view of how agencies have been swarming the Net:

I have witnessed the buzz in Hollywood in the past six months among agencies who seem to have quickly thrown together new-media units within their alternative programming divisions. Within the agency structure, again in only very recent months, it seems, movie and TV studios, networks and casting directors are seeking the next new face or the next sure-seller project among online content. Agents are scooping up as many online projects as they can in order to take charge and sign deals between their existing clients and their brand new shiny Internet ones. For the “kid” who was making low budget content in his/her bedroom and getting it online, receiving calls from Hollywood and being offered fancy agent contracts can indeed be very exciting.

It can be a great relationship and a very necessary one to boot when the right agent is passionate and head-over-heels excited about what you do, has really done their homework, understands your talents and dreams as well as your shortcomings (as if they had been your psychiatrist for the past few years), and is hungry like a grizzly bear who just woke up from winter hibernation.

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